An American-born banker whose multimillion-pound pay rewards fuelled anger against the banking sector was named in the top job at Barclays today.
Bob Diamond will take over from chief executive John Varley in March after a 14-year spell with Barclays that has seen him turn its investment banking arm from scratch into a business so large it generates more than 80% of the bank's total profits.
The 59-year-old, one of the world's richest bankers, will be paid a £1.35 million annual salary, up from the current £250,000, and stands to receive potential bonuses worth another £10 million.
In a day of upheaval in the banking sector, HSBC executive chairman Stephen Green also announced plans to step down in favour of a role in David Cameron's government. Mr Green, who has been chairman since 2005, will replace Lord Davies, the former Standard Chartered boss, as trade minister.
Mr Diamond said he was "honoured" to take on the new role, but the move is likely to enrage some politicians and union leaders.
Many consider Mr Diamond - with an estimated worth of £95 million - to be the epitome of the excessive bonus culture.
Although he waived his bonus last year after widespread criticism of bankers, he received £26 million for his shares in Barclays Global Investors, the bank's fund management business, when it was sold to America's BlackRock.
Mr Diamond was criticised in April by politicians including Lord Mandelson and Vince Cable when it was claimed he received £63 million under a reward scheme.
In his new role, Mr Diamond will receive an annual bonus of £3.375 million on top of his salary, as well as a long-term performance-based incentive worth up to £6.75 million.
Barclays said the payments were benchmarked against a peer group of other global banks and financial services firms.
Paul Kenny, general secretary of the GMB union, said the appointment was "insulting".
He said: "These are the bankers who caused the recession sticking two fingers up at the taxpayers who rescued them."
He added: "This is about as insulting and divisive as it gets. A person who poured petrol on the flames of the fires in the financial system has been rewarded rather than been punished for what he did."
Mr Diamond, who previously missed out on the role to Mr Varley in 2004, is expected to have relocation costs covered as he moves to London from New York, where he has spent the past two years integrating the acquisition of Lehman Brothers into Barclays Capital.
Under his stewardship, the investment banking division has been the powerhouse of profits growth at Barclays, with the bank reporting a 44% hike in half-yearly profits last month.
City analysts welcomed Mr Diamond's appointment and said the move showed the bank would not bow to Government pressure.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "His leadership in acquiring Lehman Brothers' assets at the height of the global banking crisis was both brave and, with hindsight, positive, with the strengthened investment bank leading the group's subsequent recovery."
David Buik, of BGC Partners, said the appointment is good news for the UK banking sector.
He said: "Though Bob Diamond comes from an investment banking background, above all else he is brilliant delegator, and, let's face it, the art of good management is delegation. He is also a supreme motivator and a bold man."
He added: "I would be fairly comfortable that this is now a strong bank which will hopefully take a lead in the recovery of the UK's economy."
British Bankers' Association chief executive Angela Knight also welcomed the move.
She said: "With Bob Diamond taking over the helm from John Varley there will be welcome continuity from a formidable team which steered one of the UK's leading financial institutions safely and successfully through the recent global financial problems."
Married with three children, the Chelsea FC supporter joined Barclays in 1996, having previously worked with Credit Suisse First Boston in Tokyo and New York, and at Morgan Stanley International.
Mr Varley will remain as a senior adviser on regulatory matters to Mr Diamond and the board until September 30, 2011.
The outgoing chief executive, who is chairman of Business Action on Homelessness, is expected to concentrate on charitable work and a range of non-executive directorships.
Mr Varley, 54, has steered Barclays through the financial crisis without the need to call on government funds.
Barclays chairman Marcus Agius said: "Barclays has been extremely fortunate to have had a banker of John's quality at the helm since he took over in 2004.
"It is equally fortunate to have an internal successor of Bob's calibre to succeed him."
Jerry del Missier and Rich Ricci, will become co-chief executives of Barclays Capital, in addition to being co-chief executives of the corporate and investment bank.Reuse content